South Africa’s Rob Sussman and Lance Fanaroff introduced (officially) in December of 2011 a cost-free money transfer system that allows anyone on Facebook to transfer money to anyone else on Facebook. The two founders have taken the concept to Facebook’s Palo Alto offices and to prominent banks and financial institutions where they have received the nod of approval.
The aha moment of the concept occurred 10 years ago when social networks were not all the rage they are now and the founders waited until the time was ripe.
According to their website, ZunguZ is essentially a multi-tiered platform that has deep integration into the Facebook social graph and a host of financial services. The first tier is live and its adoption by consumers is beyond has been beyond their expectations. They added that while there are a host of diverse P2P, P2B, B2B payment systems in the market ZunguZ does not compete with the likes of PayPal. ZunguZ is the first platform that allows a Facebook user to pay another Facebook user (with no requirement for a user to have a bank account or email address).
In an interview with The Destiny Magazine, the founders said they do not intend on big marketing budgets but rather by the referrals Facebook users will make to their friends; a concept they call “Click, purchase and share”. When you do not have an account and money is transferred to you, you simply have to pay a visit to one of the Banks on their network. The second-tier in their roadmap is the “Z-Button” which will enable one-click payments. After a purchase users are urged to share their purchase and if one of their friends makes a purchase because of them, they get a small cut or reward.
They are launching in the USA, Mexico and India and reportedly have requests from banks and telecommunications giants to join the platform.
ZunguZ has launched at a time when retailers were reportedly shutting down their Facebook shops citing poor adoption by customers and were starting to focus on using Facebook to drive traffic to their websites instead of urging people to do the shopping within Facebook. Last year, only 10 percent of Facebook users made purchases on Facebook. ZunguZ seeks to change that altogether and bring the concept of social shopping to all of Facebook’s almost billion people.
The startup’s third tier on their roadmap will be releasing an API for developers to create plug-ins for the platform. ZunguZ Inc. is a Delaware USA registered company with a presence in the heart of Palo Alto, Silicon Valley (not far from Facebook) and based in Cape Town, South Africa.
Image Credit: TechCentral
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5 comments
While an enterprising idea but are we not already inundated with online payment options to make this idea somewhat one too many? Paying someone with a facebook account from my own facebook account? Hmm!!! I can make payments using my cellphone, western union, money gram, etc? But facebook? Time will tell.
It feels really good to be proved right by the evidence of others. They did themselves a favour by doing their thing/setting up a company in the United States. Those who talk of developing Zimbabwe good for them.
Anyway, there are few issues.
First, anti-money laundering laws world over will be enough to get their thing banned in some countries. Unless they have a mechanism to tie FB accounts to real accounts with banks and telecoms companies.
Secondly, there are countries like ZW which has a law crafted for any national payment system anyone may want to set up which involves the Reserve Bank, plenty of red tape, and, lets just say i am not sure about corruption.
Lastly, i have found it rather fun to see people start businesses around FB, like one company I know which has its business built entirely on Facebook tabs and another on Facebook likes….There are some businesses i feel will be at the mercy of FB terms and conditions/policies, and these, like FBML, can be changed any time. And then what will they do? At least in Paypal’s case, it is independent of any big “supplier” that can dictate the terms at whim. I think even Bitcoins are less vulnerable.
I might also add that many big companies that no longer use FB realized that by accepting FB transactions/login/connet, they lose customers to FB which then owns then lock stock and barrel. so, if you are like Amazon and you have over 65 million customers, you would not want them dumping you to lo-in using FB that if ever Fb should discontinue FB connect for example, you would have no customers. it’s not really that advantageous in the long-run to be entirely dependent on FB.
Chikomo you are too negative to see the positives that this api or platform can do. Firstly many api founders never took their concepts that far but were snapped up by big corporates ie skype, hotmail etc and made millions form that. Then the big players can fight it off muscle for muscle. I remember when facebook came, it competed with hi5 & a host of other social startups but whos smiling now. I say fight on Cape Tonians, you might just be the next hottest platform.
Read my comment here on March 2 2012:
http://www.techzim.co.zw/2012/03/zambian-mobile-money-startup-closes-4-million-series-a-investment/
I know very well about startups that position themselves to be bought
like YouTube etc. I mentioned what you talk about way back then.
I believe in reality thinking and not negative or positive thinking. I
am commenting based on what i would describe as the ideal start-up with
long term potential. In terms of competitive advantage, theirs is
limited if it will rely solely/predominantly on Facebook.
Right now FBML will be done with this June, if i remember very well. I
know several top apps that were raking in money but which now are
staring death in the face and only those that are being reengineered
will survive. Facebook has the power to even stop accepting apps like
Angry Birds any day because it is Facebook. A clear case i can give you
is The Econet vs Trsutco case. If Econet decides it will no longer want
Trustco apps, it can simply no longer support them. At least withTrust
co there were contracts unlike with FB apps where you have to accept FB
terms and conditions/policies. Power in this case is one sided and Fb
actually dictates the fate of any app or activity on its site. remembers
days when you could import RSS feeds into your FB account? Well, FB
stopped that at whim and now you can’t, because Fb is FB.
I would rather have them base their business on several avenues than
just FB, or predominantly rely on FB. many big companies left FB because
FB will have control; of their customers and customer data.
Paypal is independent of any platform, and you can even pay with Paypal
inside FB. If FB decides not to allow payments systems other than its
own in FB, Paypal will not collapse. That is why i believe they will be
better off by nt relying too much on FB. if they can do 10% of their
business on FB and the rest on telecomms networks, then that would be
good as they would not be so vulnerable as when predominantly FB.
There is nothing negative about what i said. I think folks ought to love reality thinking more than just being positive.